MURRAY & Roberts is close to sealing a deal in which it is selling its stake in M&R Zimbabwe to a consortium of locals and foreigners. The deal is a golden opportunity for the consortium, rumoured to be headed by M&R Zim chairman and politician Mr Paddy Zhanda, because M&R is selling its stake at a huge loss, sources said last Friday.

The size of the stake being disposed of will add up to 46 percent as a related firm to M&R International, Trinvest, is also disposing its 3 percent stake.

It is understood that the Exchange Control approvals have been obtained.

"They (the consortium) are getting it very cheap," said a source. "The deal is at a huge discount, about 60 percent less market value of the company. Maybe that was a way of making the deal attractive."

"Exchange Control approvals have been obtained and both parties are not too far from sealing the transaction," another source said.

M&R was valued at US$20,3 million on Friday at US9,5c per share.

Mr Zhanda said he was aware that there were ongoing discussions between the major shareholder and a potential buyer through a published cautionary statement.

But he denied being part of the consortium.

"At the moment, I am aware out of the published cautionary statement that there are the negotiations of that nature but I am not in the picture of how far they have gone," said Mr Zhanda in an interview.

Analysts who previously commented on the deal expressed mixed reactions.

"The expert component (of M&R International) will be diluted and this may worry some foreigners who had bought shares in the company," said one stockbroker.

Some have questioned the timing of the transaction, saying it came at a time when the construction business in Zimbabwe was showing signs of recovery.

"I am not sure why M&R would pull out of Zimbabwe just as the construction sector is picking up," said a fund manager with Invictus Securities.

Murray & Roberts has been listed as a public company on the Zimbabwe Stock Exchange since 1974. The group has two operating divisions -- contracting and manufacturing. The contracting division comprises Murray & Roberts Construction Zimbabwe and Proplastics.

The manufacturing division produces and distributes a wide range of plastic piping systems for different market niches, locally and regionally. The group's contracting operations form a portfolio of complementary competencies, allowing it to undertake turnkey contracting activities.

Murray & Roberts also optimises the synergies and relationships between its portfolio of investments and those of its major shareholder, Murray & Roberts Holdings Limited of South Africa.